The fate of the U.S. financial rescue package hangs in the balance on Friday with a new version of the bill reaching the House floor at some point during the day. The second vote comes after Congress rejected the original version, sparking a massive selloff on Wall Street.

While the House of Representatives convened at 9 a.m. EDT, the financial rescue package will be allotted a three hour period for debate among members of Congress before a vote can even be considered.

The House will first vote on whether to amend the Senate's version of the bill passed on Wednesday evening.

If this vote succeeds, the amended version will have to return to the Senate for re-approval. If the amendment vote fails, the House will then decide to pass the Senate's version of the bill.

Experts agree that the earliest this could happen would be 12 noon EDT.

But there is a possibility that the bill will not pass despite the inclusion of billions of dollars in tax breaks to both taxpayers and businesses and additional powers to the Federal Deposit Insurance Corporation, which will be able to insure up to $250k in deposits compared to the $100k currently allowed.

Aside from the amendments made in the Senate on Wednesday evening when the bill passed by 74 votes to 25, the current version of the bill allows for the release of $250 billion in funding immediately to purchase illiquid assets from financial institutions. The document, entitled the Emergency Economic Stabilization Act of 2008, calls for $700 billion of funding to be delivered in stages.

"Speaker [Nancy] Pelosi made clear yesterday that she would not schedule a vote if she didn't believe she had the votes," said Tom Block of JPMorgan Chase. "There are widespread reports that some members have assured the leadership they will support the bill. It seems unlikely that many, if any, who voted for the bill on Monday have switched to a no vote. With the need to have a net gain of 13 votes, there appears to be a net gain of at least that number."

In addition, a story on says a group of Republicans in the U.S. House of Representatives may seek an amendment to reduce the size of the $700 billion bailout package.

"Ohio Rep. Steven LaTourette said 23 Republican lawmakers will seek an amendment that would lower the amount the Treasury Department could spend on the bailout to $250 billion," the story said.

If that were to happen, the amended bill would return to the Senate.

That would open up the risk that in its deliberation, the House fails to pass the bill before the markets close on Friday, which would prolong the anxiety.

By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2008